One Third of the Global Population Lives in Africa and China

China released its census data in May, revealing that the country remains the most populous country in the world with 1.41178 billion people. Once this is added to Africa’s population of 1.2 billion, it represents one-third of the total global population of 7.8 billion people. Whilst the population growth has decreased in recent years, China remains an important economy for market expansion strategies, with a middle-class whose spending power is growing fast compared to other global markets. Africa, on the other hand, is continuing its own path of increasing its number of middle-class consumers, with some African markets being among the few whose GDP grew amidst the 2020 pandemic. Whilst Africa is far behind in terms of total economic output, its similar population size and potential has some interesting trends to follow, should Africa achieve further success in growth.

COVID-19 impacted the growth of markets in all regions, with developing economies faring worse compared to the rest of the world. According to the International Monetary Fund, in 2020, global GDP declined by 3.3 percent, with advanced economies declining by 4.7 percent. The EU was particularly hit, experiencing a 6.1 percent decline. Africa was also affected, however less so than other markets. The region contracted by 1.9 percent, with North Africa declining by 1.7 percent and Sub-saharan Africa by 2 percent. Current estimates for 2021 in Africa are so far positive, with the World Bank saying that Eastern and Southern African countries are expected to grow by an average of 2.7 percent.

Most of this growth depends on how markets in Africa will recover from the pandemic during the second half of this year. China’s growing middle-class has benefitted from the measures the country took early in the pandemic, with domestic spending in retail stores and tourism being on the rise. Chinese consumers are key drivers of China’s “dual circulation” development pattern, in which the domestic and foreign markets complement and reinforce each other, with the domestic market as the mainstay. As China emerged from a pandemic lockdown, these measures helped boost domestic economy. For Africa to achieve this, it depends on how the continent continues to contain the pandemic through increase in vaccine rollouts.

Africa, like many other global markets, was beset with challenges brought about by the pandemic, as such GDP suffered, and overall purchasing power of its consumers reduced with it. However, as demonstrated by its strategic ally China, a large population can navigate through these challenges and mitigate further issues. There are positive outlooks for 2021 in Africa, China and the rest of the world, hence discussions around how best to leverage the opportunities in both, African markets and China, should not be discouraged.

1/Tunisia 2/Egypt 3/Zambia April:

Tunisia and China signed an economic and technical cooperation agreement in Tunis. The new agreement with China will allow Tunisia to benefit from a Chinese financial donation that will serve development in the country via new projects. Past China-aided projects in Tunisia include the Ben Arous sports center, the Tunisian diplomatic academy, the sports and cultural centers of Menzah 6 in the north of Tunis, the new university hospital in the south-eastern province of Sfax, and the construction of the Medjerda River canal.

April:

Egypt's Suez Canal Authority (SCA) agreed with a Chinese shipbuilder to build five tugboats. Each of the five tugs will be with a bollard pull of 80 tons. The first tug will be delivered to Egypt in 14 months, the second in 20 months and all the five tugs will be delivered in three years. The SCA is upgrading its fleets of dredgers and tugboats, not only to ease navigation in the Suez Canal but also to prepare for rescue operations inside and outside the SCA. For his part, Mostafa Kenawy, head of the dredging department at the SCA, said that besides the five tugs to be built in China, most of the spare parts at SCA workshops are made in China.

April:

China State Construction Engineering Corporation (CSCEC) has been awarded a contract for a water and sanitation improvement project in the northern part of Zambia. The firm has since engaged seven local firms as sub-contractors for the $27 million project which will improve water and sanitation services in Northern Province's two districts of Kasama and Mbala. The sub-contracting of the project was the fulfillment of the 20 percent sub-contracting policy which foreign firms are expected to offer to local ones.